Do Now Journal: In his inaugural address after taking the oath of office on January 20, Ronald Reagan called upon Americans to "begin an era of national.

Do Now

Journal: In his inaugural address after taking the oath of office on January 20, Ronald Reagan called upon Americans to "begin an era of national renewal." In response to the serious problems facing the country, both foreign and domestic, he asserted his familiar campaign phrase: "Government is not the solution to our problem, government is the problem." He hoped that America "will again be the exemplar of freedom and a beacon of hope for those who do not have freedom."

Assess Reagan’s attitude towards the US and its government. Do you believe this is a good attitude to have when entering the presidency? If not, what would you say or do differently?

Reaganomics

Personal Background

-born 2/6/1911 in Illinois

-died 6/5/2004 in California

-Nicknamed “Dutch”

-Attended Eureka College;

Majored in economics and

sociology

-Began as a sports announcer

-Warner Brothers 7 year contract

-AAF: First Motion Picture Unit

Political background

Jimmy Carter → Reagan → George H.W. Bush(39) (40) (41)

33rd Governor of CA (‘67 -’71)

40th President of the US (’81-’89)

Republican post’62

Actor before politician

What are Reaganomics?

-Economic policies supported and pushed by Ronald Reagan during his presidential term.

The problem

– Too much government regulation– Too many taxes on higher income levels were

actually decreasing tax based revenue– Too many social spending programs– Stagflation (high inflation – low economic growth)

Reaganhttp://www.fofweb.com/NuHistory/LowerFrame.asp?ItemID=WE52&iPin=WPA0886&SingleRecord=True

The Goal

Balance taxes in order to increase government tax revenue and stimulate the economy

Implementation

– Based on the principals of supply-side / trickle-down economics, which essentially stated that by decreasing taxes at higher income levels it would incentivize more spending which would ‘trickle down’ all the way to the lower income levels

– For example, a rich person does not have to pay as much in taxes -> they have more money left to spend and invest -> the invested money creates more jobs, the spent money stimulates the economy and helps strengthen the newly created businesses -> the government makes more tax revenue thanks to all of the new businesses

– After hearing this Congress approves a 25% tax cut on the upper tax bracket

Results– 1981-1982, the tax cuts

leads to inflation and higher interest rates, the value of the dollar rises leading to increased importing and decreased exporting, all of these lead to a recession

– Following 1983 the economy began to stabilize and the plan worked out, leading to national growth

198119821983

Stagflation

- This was a problem Reagan faced when he came into office

- High inflation rates combined with low economic growth and unemployment were hurting the economy

- Combated by controlling money supply and through tax cuts

Increase of National Defense

– Reagan increased spending on national defense due to a fear of the Russian ‘window of opportunity’ for attack

– This lead to higher national deficit, especially when combined with the immediate results of the tax cuts

Increase of National Defense

–Contracts given out in order to bolster US Military–Reagan also called for the creation of the

Strategic Defense Initiative, a missile based anti-nuclear weapon defense system that would be kept in outer space• Scientists were skeptical, critics called it ‘star

wars’

Results

• There were small pushes to decrease government spending in order to decrease deficits, but very few programs ultimately got cut• The national debt increased by 300%,

from 1 trillion to 3 trillion dollars•Went from world’s largest creditor to

world’s largest debtor nation

The Four Pillars of Reaganomics

• Reduce the growth rate of government spending

• Reduce income tax and capital gains tax

• Reduce the level of government regulation over the economy

• Reduce inflation by controlling the supply of money

Applied ReaganomicsTake this hypothetical scenario: • A business man has $1,000,000, and wants to keep $100,000 and invest the rest of

the money he has left after taxes.• A small business that makes $100,000 per year needs a $450,000 investment to

open up its new shipping department that is projected to bring in $100,000 annually.

• Several unemployed people want a $75,000 per year job• In 1980 the tax rates on income are:

– 70% for $215,000+– 68% on $162,000 - $215,000– 59% for $85,000 - $109,000– 54% for $69,000 - $85,600

• After congress’s initial tax cut, the top bracket tax rates were reduced to 45%

3 Strikes and Get Even

Reagan / Reaganomics Edition

Rules6 teams Goal: Be the last team To get three strikes-Answer questions correctly to try and be eligible to distribute strikes to other teams-Once a team has three strikes, they cannot win, however, that team can still answer questions and give strikes to other teams -rounds 1 + 2, 3 strikes, rounds 3-6, 2 strikes, rounds 7+, 1 strikeEXCESSIVE TALKING CAN RESULT IN A STRIKE

The Prize

CANDY

Clear Desks of all NOTES

Who was president before Reagan?

Carter

What Are the main principles behind Reagan’s Tax cuts?

Supply-Side / Trickle-Down economics

Name two objectives of Reaganomics.

• Reduce the growth rate of government spending

• Reduce income tax and capital gains tax• Reduce the level of government regulation

over the economy• Reduce inflation by controlling the supply of

money

In what year did Reagan shift from the Democratic party to the Republican party?

‘62

How much did the national deficit increase as a result of reaganomics?

3XBy 300%

What is the name of the anti-nuclear weapon defense system that Reagan called for to be put in outer space?

Strategic Defense Initiative

What was Reagan’s nickname as a child?

Dutch

What % tax cut did First Congress approve while implementing Reaganomics?

25%

On what day exactly (mm/dd/yyyy) was Reagan first inaugurated into the presidency?

1/20/1981

In which area did increased spending lead to National deficit?

National Defense

What is stagflation?

When there is high inflation and low economic growth

Works Cited• Dobson, John. "Supply-Side Economics and the Reagan Administration." American Government. • ABC-CLIO, 2012. Web. 23 May 2012.• Hardman, Steve. "Reaganomics." In Critchlow, Donald T., and Gary B. Nash, eds. Encyclopedia of • American History: Contemporary United States, 1969 to the Present, Revised Edition

(Volume • X). New York: Facts On File, Inc., 2010. American History Online. Facts On File, Inc. Web. 23 • May 2012.• Knott, Stephen, and Jeffrey L. Chidester. "Reagan, Ronald." The Reagan Years, Presidential Profiles. • New York: Facts On File, Inc., 2005. American History Online. Facts On File, Inc. Web. 23 May • 2012.• "Ronald Reagan Addresses the Growing National Deficit." The WPA Film Library. WMV video file. • American History Online. Facts On File, Inc. Web. 23 May 2012.• "Ronald Reagan Addresses the Growing National Deficit." American History Online. Facts On File, • Inc. Web. 23 May 2012.• Stanford University. "Federal Income Tax Brackets and Maximum Tax Rates: 1950-1980." • Stanford.edu. Stanford. Web. 24 May 2012.• Ushistory.org. “Reaganomics.” U.S. History Online Textbook, n.d. Web. 23 May 2012.